Newsflash: Lotus wil met SUV divisie naar de beurs

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+++ The new new V8-powered ASTON MARTIN DBX 707 just edges the V12-engined DBS grand tourer on outright acceleration, but boss Tobias Moers has no immediate plans to phase out the company’s own 12-cylinder motor. Asked if the DBX 707’s V8 (a modified version of Mercedes-AMG’s most potent engine) could replace the V12 in the DBS and the top-rung DB11, Moers said: “No, we won’t do that. The V12 still has a bit of potential, and having the V12 Vantage shows there’s still room for a V12 in our sports car generation”. The new V12 Vantage is expected to use a similar powertrain configuration to the V12 Speedster, which makes 700 hp and 750 Nm. It has already been confirmed as a swansong for the V12 Vantage name, but Moers’s latest remarks suggest the engine will maintain a role in Aston Martin’s sports car programme. “The V12 Vantage gives an impression of where we move with the brand”, Moers said. “It’s the highest-performance sports car Aston Martin ever did. It gives an idea what we’re going to do with sports car manufacture”. He revealed that the end of the lifecycle for the V12s will be 2026-2027. “If you still have customers chasing it, it’s small numbers”, he added. “We’re not talking about mass production”. That suggests the V12 could become a highly bespoke offering or be used only in ultra-exclusive special editions. It almost certainly won’t be used in a potent version of the DBX, with Moers listing driving dynamics and weight distribution as factors that would be adversely affected. Aston Martin currently uses AMG’s V8 and straight-6 engines across its line-up, but the turbo 4-cylinder destined for deployment in the next generation C 63 and E 63 would be “a step too far”, according to Moers. “It might be my brainchild, but it doesn’t fit with Aston as a brand”. +++

+++ BMW has become the first international carmaker to take majority control of its Chinese joint venture, after the German company raised its stake in BMW Brilliance to 75 percent. The German carmaker inked an deal with Brilliance Auto to scale up its stake in their joint venture from 50 percent to 75 percent, when China announced in 2018 it would relax ownership rules in the automotive industry. The Chinese authorities removed foreign ownership caps for companies making fully electric and plug-in hybrid vehicles in 2018. The same rules took effect for commercial vehicle makers in 2020 and for the passenger car market starting from 2022. Analysts said a majority stake in joint ventures, which means a larger say and more profit, will stimulate international carmakers’ ambition and commitment in China, the world’s largest vehicle market. Besides the equity change, BMW and Brilliance’s contract to extend their joint venture took effect as well. Established in 2003, the partnership now runs to 2040. “Today marks an important step, as we continue to expand our long and successful commitment to China”, said BMW chairman Oliver Zipse in a statement. “We firmly believe that our continued success in the world’s largest automotive market can only go hand in hand with the growth and further development of our BBA joint venture”, said Zipse. BMW saw a 9 percent growth in its deliveries in China to 846.237 vehicles in 2021, as the bestselling premium carmaker in the country. BMW Brilliance, based in Shenyang, Liaoning province, produced 700.000 vehicles in the year. Chief Financial Officer Nicolas Peter told reporters that BMW’s sales are expected to grow further in 2022 as the demand continues to grow in China. BMW said it is expanding its production capacity in China, with one plant is currently being expanded and a new one under construction. Among other vehicle models, BMW will start producing the X5, previously imported from the United States, in the second quarter of the year at the BMW Brilliance joint venture. “Our extended joint venture contract lays the foundation for further mutual growth and progressive development in the future. It therefore paves the way for balanced development in the three main regions of the world, as we have done in the past”, said Peter. Some other international carmakers are mulling raising the stakes in their joint ventures as well. Late last month, Stellantis said it would like to increase its equity from 50 to 75 percent in its joint venture GAC-Stellantis, adding this will set a new basis for its business in China. +++

+++ About 6 months after Gary Gilpin leased a Subaru Outback from a California dealer, the screen went blank and wouldn’t come back on. Gilpin took the car to the dealer for what he figured would be a quick reset. “It was a whole month before I got my car back”, said Gilpin, who runs a sailboat chartering and brokerage business. Some people would have just fumed. Gilpin sued. He is among thousands of car owners, encouraged by plaintiffs’ lawyers, who have joined class-action lawsuits that accuse carmakers of selling vehicles with FAULTY ENTERTAINMENT AND RELATED SYSTEMS . Their complaints are as numerous as they are varied: screens that freeze, flicker or go dark; sound that cuts out or unexpectedly blasts at high volume; backup cameras that fail. Often the problems involve the way in which the hardware interacts with Apple’s CarPlay or Google’s Android Auto software, which allow drivers to use their phones to navigate, communicate or listen to music and podcasts. Buggy car software may seem like a mere inconvenience. But plaintiffs have successfully argued that a malfunctioning dashboard display is a serious distraction and potential safety hazard. The suits are a symptom of the automakers’ rocky transition to the digital age and their struggle to integrate the latest technology into vehicles, which must meet safety requirements that smartphones and other electronics do not. Old-line automakers are losing ground to Tesla and other young electric carmakers that have placed much greater emphasis on software. And in their own cars, established automakers are effectively handing over more power to Apple and Google, which dominate the digital world. So far, the settlements that automakers have had to pay are relatively modest. In 2020, Subaru settled the suit brought by Gilpin and others; it cost the company an estimated $8 million, including lawyer fees and an extra 2 years of warranty protection. In December, Honda of America and its Acura subsidiary agreed to settle a similar class action for an estimated $30 million, according to plaintiffs’ lawyers, including extending the warranty on systems that buyers complained were flawed. Neither Subaru nor Honda admitted any wrongdoing. Honda declined to comment, and Subaru did not respond to requests for comment. The case that set the precedent was brought by Ford customers who complained of defects with the MyFord Touch system. The automaker settled that lawsuit in 2019 for $17 million without admitting any wrongdoing. The sums hardly compare with the hundreds of millions of dollars that Toyota and other carmakers paid to people injured by faulty airbags, or the billions that Volkswagen paid to owners of cars with software designed to mask illegal pollution levels. But the stakes for carmakers go far beyond the cost of the lawsuits. As the lawsuits indicate, traditional carmakers have struggled to develop navigation systems and other services that work as well as the ones found in Apple and Google devices. They are also far behind Tesla, which loads the large interactive screens in its cars with software developed in-house and does not support CarPlay or Android Auto. Established carmakers have been forced to cede valuable dashboard real estate to Silicon Valley, while remaining the target of consumer ire (and class-action lawsuits) when something goes wrong. Before Big Tech invaded car interiors, the automakers were lords of their realm, dictating terms to suppliers. But Apple and Google command financial resources and software expertise that even auto giants cannot match. “The game has completely changed”, said Axel Schmidt, a senior managing director at Accenture who manages the consulting firm’s automotive division. The big automakers, he said, “are not used to dealing with partners that are much stronger and bigger than themselves”. Software makers’ clout over the car industry will only grow as vehicles incorporate more and more driver-assistance systems and other digital technology. The automakers are in a tough spot. They operate on timelines that are out of step with the speed of digital technology. A new vehicle typically takes four years to develop, including laborious safety testing. Owners often drive the same car for more than a decade, an eternity in the tech world. “The time window of developing vehicles and putting the hardware into those vehicles is quite different than for a cellphone”, said Mark Wakefield, co-leader of the automotive and industrial practice at AlixPartners, a consulting firm. “When a vehicle is done, it’s done. Software is never really done”. Apple introduces a new iPhone about once a year, and releases new versions of its operating system even more frequently, as does Google. Carmakers face the nearly impossible task of designing entertainment systems that work flawlessly with software and devices that haven’t been invented yet. “After every update we get complaints CarPlay is not working”, said Serhat Kurt, who operates a website, macReports, that provides advice on fixing problems with Apple devices. Kurt faulted both the carmakers and Apple; the carmakers for being “not very good with software”, and Apple for not doing enough to ensure that software updates work with older vehicles. Lawsuits so far have blamed established carmakers, not Apple or Google. Sean Matt, a partner in Seattle at Hagens Berman, the law firm that represented owners in the suit against Honda, said he “can sympathize with the engineering challenge” that carmakers face in designing systems that work flawlessly with ever-changing smartphone software. But Matt added, “They are giving you a product and saying it will work, and ultimately the onus is on them.” That does not mean that Apple and Google are immune. If the Subaru lawsuit hadn’t been settled, there “would have been a real possibility that they could have been brought in”, said Benjamin Johns, a partner at the Pennsylvania firm Chimicles Schwartz Kriner & Donaldson-Smith, which represented Subaru owners. A Google spokeswoman, Sofia Abdirizak, said in an email: “Our general practice is to provide manufacturers with sufficient notice ahead of major updates.” She declined to comment further. Apple, which provides automakers and other software developers with beta versions of iPhone updates before their general release, declined to comment. Such lawsuits are not just a problem for the old-line carmakers. Tesla emerged from Silicon Valley, and its software is regarded as being far more advanced than that of the Detroit giants. But last year, under pressure from the National Highway Traffic Safety Administration, Tesla recalled more than 100.000 S and X models built before 2018 because their touch screens could fail. The defect is also the subject of a class-action lawsuit, which Tesla is contesting. Tesla is able to send software updates to its cars over cellular connections, regularly adding features, even in cars that have been on the road for years. A vast majority of cars made by old-line auto companies can’t be updated remotely in the same way. As established carmakers pack vehicles with more and more technology, flawed software seems likely to continue to generate lawsuits. The Chimicles firm is working on two potential cases based on complaints from car owners, Johns said, though the suits have not yet been filed. He declined to name the automakers, but the firm is advertising on its website for owners of Mazda or Volvo cars whose dashboard screens have frozen or suffered other problems. The carmakers “are getting better at technology”, Johns said. “But the technology is continuing to evolve”. +++

+++ HONDA ’s profit dropped 32 % in the last quarter as rising material costs and a shortage of computer chips hurt the Japanese automaker. Honda’s profit for the 3 months through December totaled 192.9 billion yen ($1.7 billion), down from 284 billion yen the year before, the Tokyo-based company said. Quarterly sales slipped 2 % to 3.7 trillion yen ($32 billion). Like the rest of the world’s automakers, Honda’s manufacturing also has been affected by delays due to measures to curb coronavirus outbreaks. Japan’s top automaker Toyota reported a similar drop in profit. Honda, which makes the Accord sedan, Gold Wing motorcycles and Asimo robot, said it expects the challenges to persist. Rising material costs are also a problem, but the company said cost-cutting efforts allowed it to raise its profit projection. It raised its full fiscal year profit forecast to 670 billion yen ($5.8 billion) from an earlier projection of 555 billion yen ($4.8 billion), an improvement from the 657 billion profit earned in the previous fiscal year. +++

+++ HYUNDAI  is far from the top automobile brand of choice in China, but its luxury-car division is seeking to change all that with a direct-to-market strategy targeting young, upwardly mobile consumers. Genesis made its debut in China in April last year after entering North America, Australia and the Middle East. Interestingly, its line up in the world’s biggest car market won’t include an electric vehicle, at least initially. “It is a tough market to enter but we can’t be a truly global brand without being in China, the most important market in the world”, Genesis China chief executive officer Markus Henne said. 3 models are currently available: the G70, G80 and GV80, starting from 249,800 yuan ($39,300), and electric models should be added later this year. Tesla’s model Y starts from around 300.000 yuan by comparison, while an entry level BMW or Audi typically costs north of 200.000 yuan. Car sales in China climbed 4.5% last year, rising for the first time since 2018, helped by demand for new-energy vehicles and premium automobiles. BMW posted record annual sales of more than 846.000 cars in China with its local partners in 2021, while data from the nation’s Passenger Car Association show the luxury market expanded almost 5 % over the period. Henne acknowledged the growing appetite for EVs in China but said Genesis believes traditional cars will remain a popular choice for the foreseeable future. Around 1 in every 5 cars sold in the nation in December was electric. The company wants to position the Genesis brand first and it “can’t hurt to have 2 legs to stand on”, he said. As a brand, Genesis, which launched in 2015, aims to only bring in electric models from 2025. In China, Henne said a bigger lineup than local EV-makers like Li Auto and Xpeng, plus a direct-to-consumer sales model, will make it more competitive and nimble. Hyundai, for its part, has struggled in China. Buyers have long shunned the automaker because of its fading brand recognition and political tensions (in 2017 there was a spat when South Korea added more launchers to a missile system in response to North Korea testing nuclear weapons). State media also hasn’t been kind, labeling Hyundai greedy and arrogant. Along with affiliate Kia, Hyundai only sold around 380.000 cars in China in 2021, even though Hyundai’s plants in the country have capacity of about 1.25 million. By comparison, Volkswagen delivered 3.3 million cars. Kia’s joint venture in China, Dongfeng Yueda Kia Motors, has been posting losses for the past 5 years, according to Meritz Securities. “Hyundai is sandwiched between premium carmakers and local Chinese automakers”, said Moon Yong-Kwon, an analyst at Shinyoung Securities. The automaker has focused for too long on old and outdated models and hasn’t moved fast enough to embrace the high-tech features that Chinese consumers love, he said. Some analysts also question Genesis’s ability to step out from its parent’s shadow. “I’m not sure Genesis can be successful in China because the loyalty of Chinese consumers toward Hyundai’s cars isn’t strong”, said Kim Jin-Woo, an analyst at Korea Investment & Securities. Genesis’ strategy of selling direct to consumers has also drawn comparisons with Tesla, which pioneered the business model, and Nio, which has built a reputation on offering drivers a whole lifestyle let alone an EV, with its network of social clubs, merchandise and exclusive events. “A direct-to-consumer approach is definitely a good move when introducing a new brand as you’re less encumbered with existing franchise commitments”, said Bill Russo, the founder and CEO of Shanghai-based advisory firm Automobility. “This trend is also synchronous with the trend toward building a community around a more tech-oriented brand. Whether a traditional automaker can pull it off (even with a new brand) is yet to be proven”. Henne isn’t too worried, predicting many Genesis customers will be first-time car buyers who haven’t really interacted with other brands, including Hyundai or Kia. “I have very big ambitions but I wouldn’t measure that in sales”, he said. “I have the ambition that in five years we’ll be one of the top luxury brands in China, period”. +++

+++ JAPAN ’s top carmakers are on track to increase profit, buoyed by higher vehicle prices on the back of robust demand that’s making up for Covid-19 related factory halts and chip shortages. Even so, most of them appear to realize they’re not in the clear just yet. “The more semiconductors we get, the more we can grow”, Ashwani Gupta, chief operating officer of Nissan, said during an earnings briefing earlier this week. Honda joined Nissan in upgrading operating profit forecasts for the fiscal year through March, after a rough start last year. Toyota kept its forecast for ¥2.8 trillion ($24 billion) in annual operating profit, even after halting domestic output for several days in January. The carmakers proved over the past half century that Japanese manufacturing could not only compete, but dominate the global auto industry. Now, they’re in the unfamiliar territory of not being able to predict their own fate because of the global chip crunch, fueled by booming demand for computers, gadgets and devices as people work remotely and spend more time indoors. Macquarie Securities Korea is forecasting “slower-than-expected normalization of IC chip supply”, analyst James Hong said in an email. While tight supplies of semiconductors are set to ease later this year, the next bottleneck is likely to come from growing demand for analog chips, which are increasingly being used in automobiles as they become electrified and autonomous. Last year’s chip crunch was mainly due to a shortage of microprocessors, the main computing chips that are used in smartphones and computers. “Analog chips are likely to become the main constraint for vehicle production for the next 3 years”, IHS Markit wrote in a report last month. Covid-19 lockdowns, missing parts and shortages of chips are common challenges that automakers are facing across the globe. These disruptions will restrict vehicle production through the end of this year and push a broader market recovery into 2023, according to a recent report by Fitch Solutions. Compared with its initial outlook, Toyota has mostly kept on track. The world’s biggest carmaker’s operating profit forecast is slightly higher than the initial outlook issued in May, while its sales forecast was trimmed slightly because of production halts. Honda was forced to downgrade its outlook in November because of the chip crunch, fueling concerns over its ability to recover profit and sales. The carmaker bounced back this week, however, and now sees fiscal year operating profit of ¥800 billion, even higher that it originally forecast last year. Nissan, which initially forecast flat annual profit, now sees profit of ¥210 billion for the year ending March, thanks to favorable exchange rates and vehicle profit margins. Nissan also embarked on a recovery plan in 2020 to remove about ¥300 billion in annual costs, reduce capacity and cut back on margin-eroding incentives. Koji Endo, an analyst at SBI Securities, sees semiconductor supplies improving as chipmakers ramp up production globally. The supply crunch will probably continue for the first half of the fiscal year and improve in the latter half, he said. “Although slight, automakers’ output is getting better”, Endo said. Even so, it may be too early to celebrate, Mitsubishi chief financial officer Koji Ikeya said during an earnings briefing this week that the outlook remains murky, with a high chance of a prolonged chip crunch. “We’ll see the impact in the next year”, Ikeya said. Analysts at Bloomberg Intelligence say that auto production is now starting to exceed their output plans. “Uncertainty around chip shortages still continues but automakers will reach pre-Covid production levels if they boost 5-10 % of their output”, wrote Masahiro Wakasugi and Tatsuo Yoshida in a note dated February 4, adding that they are expecting sales to recover in 2022. The upside for earnings is that since demand is strong, car prices are going up and automakers that relied on discounts are selling cars without doing so, said Seiji Sugiura, an analyst at Tokyo Tokai Research. “They’re being patient because demand for new cars is piling up”, he said. But for now, “automakers can’t do anything so they have no choice but to wait”. +++

+++ LOTUS is pushing ahead with plans to float its Technology division on the stock market in a move that would value it at £5-6 billion, the company has said. Lotus is in the middle of a roadshow starting in China and is currently in London to give potential investors a sneak preview of next year’s electric SUV, codenamed Type 132. The Geely-owned brand told investors that it plans to sell 100.000 cars per year by 2028, of which 90.000 will be electric saloons and SUVs produced by Lotus Technology. The purpose of the roadshow is to “take the temperature” of investor’s enthusiasm in buying Lotus stock, a spokesman said. He said the company favours an IPO (initial public offering) over the SPAC (special purpose acquisition company) method of listing that was recently employed by Geely stablemate Polestar, despite the extra scrutiny involved in the more traditional route to market. Lotus aims to float in 12-24 months, but the decision over whether to do so in Asia, London or New York hasn’t yet been taken, the company said. The reaction in China to the potential float has been “strong”, the spokesman said. The decision to list Lotus Technology and not Lotus Cars, which focuses on the brand’s traditional sports car business, is down to the ownership structure of the divisions, the company said. Lotus Cars is 49 % owned by Etika Automotive, a company controlled by Malaysian billionaire Syed Mokhtar Al Bukhary, who formerly owned Lotus through another company, DRB-Hicom. Etika meanwhile has a smaller stake in Lotus Technology at 30 %. Lotus will follow the launch of the Type 132 next year with a Porsche Taycan-size electric saloon codenamed Type 133 in 2023 and then a “ground-breaking” smaller SUV in 2025. The Type 135 electric sports car will arrive in 2026 and eventually replace the imminent ICE-powered Lotus Emira. The electric SUVs and saloon will be built in a new £900 million factory in Wuhan, China. The Geely-owned plant has the capacity to build 150.000 cars per year for sale in China and globally. It also has a test track, like Lotus’s headquarters and historic manufacturing base in Hethel, Norfolk. Lotus’s transformation from struggling maker of niche sports cars to potential global rival to Porsche began in 2017, when Geely bought a majority stake and vowed to overhaul it. Geely’s investment of more than £1.5 billion included a major upgrade of Hethel, the addition of a design centre in Coventry and a new technical hub in Frankfurt, Germany. Lotus CEO Matt Windle described the extent of the transformation as something “never undertaken in the automotive industry before”. Is Lotus a wise buy? On the face of it, buying stock in Lotus Technology looks a risky bet. You’re not owning any part of the Lotus Cars sports car division; the size of the market for an electric Lotus SUV or saloon tilting at Porsche or even Bentley is uncertain at best; and the stock market isn’t a happy place right now for young EV companies. For example, Rivian is 64 % off its highest stock price, while Lucid is down 57 % and Fisker is down 60 %. But Lotus is undeterred. It points to technology leadership (for example, in in-built lidar for autonomous driving); an “asset-light” structure that means it taps into Geely’s global manufacturing capability without splashing out big sums itself; and the fact it has a resonant brand name, at least in some countries. The company’s strong Chinese connections will also boost it in the world’s largest new car market, which increasingly leans towards home-grown, technology-led products. As for not getting to own a chunk of Lotus Cars, that’s probably a good thing, given its financial history. +++

+++ RENAULT will reveal a new concept car in May, showcasing a fresh approach to design and previewing plans for a hydrogen combustion engine. The car was previewed in the firm’s annual results presentation, and while details are thin on the ground, it clearly bears a raft of new design cues, including angular new daytime running lights, a heavily sculpted bonnet and a flush front end that looks to be modelled on the new Renault 5. The concept has yet to be named, but visual similarities with the 5 suggest it could preview the similarly retro-styled 4ever crossover, which is due on sale in 2025. It will also showcase Renault’s circular economy ambitions by employing recyclable materials throughout its construction. Company CEO Luca de Meo was keen to emphasise that it is more than a simple design study: “When we do a concept, we want to turn that into real cars”, he said. Details of the powertrain will be given at the reveal, but Renault’s use of the phrase “hydrogen engine” strongly implies a deployment of a modified petrol motor that runs on hydrogen. The firm currently uses hydrogen in commercial vehicles, but so far in only conventional fuel cell drivetrains. This technology is emerging as a potential means of reducing fleet emissions without integrating costly and heavy EV drivetrains, with Toyota and Yamaha among its highest-profile proponents so far. The 2 Japanese firms yesterday revealed a 5.0-litre V8 that has been converted to run on hydrogen. The eventual production car could also be available with a pure-electric powertrain, though. De Meo said the concept will showcase “electric, hydrogen… maybe other things”. Notably, Renault has confirmed plans to go all-electric by 2030, which suggests that if it does launch a hydrogen combustion engine in a production car, it will serve as a bridge offering to a full-EV. Renault will unwrap the concept in May at “a big event”, which will centre around the 3 core themes of de Meo’s company transformation strategy: safety, inclusion and environment. “On-board technical innovations” suggests the concept will preview a new approach to interior design and equipment as well. +++

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+++ A California agency has filed a racial discrimination complaint against TESLA , accusing the electric carmaker of racial segregation at its factory in the state, according to a statement. The California Department of Fair Employment and Housing (DFEH) “found evidence that Tesla’s Fremont factory is a racially segregated workplace where Black workers are subjected to racial slurs and discriminated against in job assignments, discipline, pay, and promotion”, said Kevin Fish, the agency’s director. Black workers at the factory were regularly subjected to deeply offensive racial slurs and racist jokes by co-workers and managers, the complaint said. Fish said the agency received hundreds of complaints from workers at the plant. “The facts on this case speak for themselves”, he said. Ahead of the filing, Tesla released a statement Tuesday saying it “opposes all forms of discrimination and harassment” and said it is committed to providing “a workplace that is safe, respectful, fair and inclusive”. But excerpts of the complaint, released by the agency and filed in a California court, paint a very different picture. The agency said non-Black workers would regularly refer to areas where many Black or African-American workers were stationed with racist historical names, including “the plantation”. Workers would commonly be “taunted by racial slurs and then baited into verbal and physical confrontations” by non-Black workers and would subsequently face disciplinary action, the complaint said. Non-Black workers were frequently given preferential treatment at the plant, according to the filing, including being handed easier jobs and given greater leniency in disciplinary proceedings compared to their Black or African-American colleagues. One worker “heard these racial slurs as often as 50-100 times a day” and workers with racially-incendiary tattoos of the Confederate flag would make them visible to intimidate Black employees, the DFEH said. The company, owned by billionaire Elon Musk, has been hit with several lawsuits alleging discrimination at the California factory in recent months. In December, 6 women sued the company, alleging a culture of sexual harassment at the plant and other facilities. The lawsuits were filed within a month of 2 others. +++

+++ TOYOTA logged a forecast-beating net profit of 791.7 billion yen ($6.8 billion) for the 3 months to December, even as a global chip crunch and a pandemic-driven parts shortage forced production cuts. The Japanese auto giant, which kept its crown as the world’s top-selling carmaker in 2021, left its annual net profit forecast unchanged but slightly lowered its full-year vehicle sales target. It posted a 791.7 billion yen net profit for the three months to December, down around 5 percent on-year but far better than the 619.2 billion yen predicted by analysts. For the 9 months to December, the firm logged net profit of 2.31 trillion yen, a jump of 57.8 percent on-year. Sales for the same period rose 19.2 percent to 23.26 trillion yen. “Despite negative factors such as constraints on supply due to the shortage of semiconductors and the spread of Covid-19, as well as the sharp rise in raw material costs, we achieved higher sales and profits” in the first 9 months of the financial year, Toyota said in a statement. This was a result of sales and marketing initiatives, “supply chain efforts” and the appeal of its new products, the company added. The effect of foreign exchange rates boosted its operating profit by 445 billion yen in the nine-month period, it said. Toyota cited the pandemic and chip shortage on a decision to slightly lower its production projection for the year to 8.5 million units from 9 million, having already reduced it from 9.3 million in November. “Despite reducing the production volume forecast, we have left the operating income forecast unchanged, taking into account the depreciation of the yen and the accumulation of profit improvement activities”, Toyota said in the statement. When the Covid pandemic first triggered a global drought of semiconductors (an essential component of modern cars) Toyota appeared better placed than its rivals to weather the crunch, having strengthened ties with its domestic suppliers after Japan’s 2011 earthquake and tsunami. But with the crisis showing no signs of ending, the automaker has found itself unable to escape the effects. A weaker yen, high demand and internal cost-cutting measures have cushioned Toyota’s profits despite the production cuts, and on Wednesday it maintained its full-year profit forecast of 2.49 trillion yen. Toyota hung on to its title as the world’s top-selling automaker last year when it sold nearly 10.5 million vehicles; a jump of about 10 percent from 2020, including units made by its Daihatsu and Hino subsidiaries. The firm increased its lead over German rival Volkswagen, which shifted 8.9 million vehicles in 2021, down 4.5 percent on-year owing to the chip drought. The Japanese company also led U.S. automobile sales last year, overtaking General Motors for the first time. Toyota announced Friday that it will further expand production of electric vehicle parts at plants in West Virginia and Tennessee in a $90 million investment. The announcement comes 3 months after the Japanese automaker said it would invest $240 million to add a production line dedicated to hybrid powertrains at its facility in Buffalo, West Virginia. The latest upgrade involves spending $73 million at the plant to annually assemble an estimated 120.000 rear motor stators, a key component in electric motors. “Toyota is moving quickly toward an electrified future, and West Virginia will play a critical role in that journey”, David Rosier, president of Toyota Motor Manufacturing West Virginia, said in a statement. “Our team embraces this challenge, and it’s clear Toyota has faith in our ability and trusts us to take the company to new heights”. A year ago Toyota invested $210 million at the Buffalo plant and added 100 new jobs to expand capacity of its 4- and 6-cylinder engine lines. The plant employs about 2.000 workers. Toyota also said Friday that it will spend $17 million to increase the production capacity for hybrid transaxle cases and housings at its nearly 400-worker facility in Jackson, Tennessee. The automaker said it is committed to offering electric vehicles across its lineup of Toyota and Lexus vehicles by 2025. In October, Toyota said it planned to build a new $1.29 billion factory in the U.S. to manufacture batteries for hybrid and fully electric vehicles. +++

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